Piracy of entertainment content on the Internet is a growing pain in the wallet for artists and executives in several huge industries. Just ask any music mogul who has fretted over the explosion of copyrighted songs that have been pirated and made available for free in the MP3 format on the Net. The rise of emulators could present an even more insidious problem. For one thing, annual sales of video and computer games, at $6.3 billion, have surpassed those of recorded music and even movies ($6 billion). And piracy hits the games industry harder, undercutting sales of both consoles and games, which at $50 to $60 for a top-rated title like Rogue Squadron or Tomb Raider 3 cost four times as much as a music CD. No wonder the games industry lost a staggering $3.2 billion to piracy in 1998--about $1 billion more than the music industry did.
We're talking about an hour to download a game over a 56K modem, so it's no easy task, says Kevin Hause, a gaming analyst with tech experts IDT. But these games are expensive. Compared with MP3, the desire to do this is greater. And the opportunity, despite the risk of felony prosecution, is growing. Illegally copied games sites are proliferating so fast that stamping them out is akin to playing wack-a-mole at the county fair, says Kathlene Karg, one of the IDSA investigators who raided McLaughlin's operation. Case in point: the IDSA managed to shut down 400 sites in the past year--impressive but less than 1% of the estimated total.
Until very recently, emulators had a more innocent image. They were--and to many gamers still are--a way to connect with a simpler computer era and play legendary games for long-dead consoles like the Commodore 64 or Atari 2600. Like so much of late-'90s culture, the emulator scene became cool by being retro. Nick Vigier, 19, a computer-science major at Carleton College in Northfield, Minn., last summer found and downloaded a classic version of Frogger and an Atari emulator. Sounding like a member of a previous generation who collected Pez dispensers, he explains, You can relive your childhood.
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Meanwhile, Sony encountered an emulator nightmare of its own--only this time the perpetrator was another large software firm. Connectix in January came out with Virtual Game Station, which allowed Macintosh owners to play Sony video games for a mere $50. Macheads snapped up a whopping
$3 million worth over three weeks. Sony promptly sued Connectix, which denies any wrongdoing. Last month a judge refused to block shipment of the software while the case is pending. Though it's clearly unlawful to sell or download pirated video games, it remains unclear whether the same strictures apply to emulator software, as Sony and Nintendo claim. In the meantime, another company, Bleem, is working on a Virtual PlayStation for Windows.
The emulator craze is still in its early stages, and may yet work in the companies' favor. Sony, analysts say, is losing money on every PlayStation console it sells because of aggressive price cutting. If users start trashing their consoles in favor of a PC keyboard, the Japanese giant might make more of a profit from games licensing. Sony games, even in their pirated Internet versions, contain about five times as much digital information as Nintendo's, and are thus more difficult for illegal users to download. They must copy CDs, using special $300 drives, and install a mail-ordered $4 modifying chip--a significant psychological barrier to mass piracy. And Sony has an ace up its sleeve in the shape of the PlayStation II, set to wow its first U.S. users at the turn of the millennium. Nintendo looks more vulnerable to emulators. Its cartridge-based games are much smaller, download more quickly--and, with UltraHLE, play easily on any PC.
Ultimately, the only way to beat the pirates may be to join them on the Internet. Nintendo is considering making its paid-for games as easy to download as the rip-offs. Then again, as videogames.com reviews editor Jeff Gerstmann notes, some people will always find a way to get something for nothing.
With reporting by Marc Hequet/St. Paul and Janice Maloney/San Francisco